It is harder to counterfeit, more durable, more environmentally friendly, cleaner, and cheaper, the Bank said. Crucially, plastic money can survive a washing machine cycle unscathed.

If adopted, the Bank will also introduce smaller banknotes, making them “easier to fit into purses and wallets”. The first note would be the £5 Sir Winston Churchill bill, which could be in circulation in early 2016. That would be followed shortly by the £10 Jane Austen note.

Focus group studies conducted by the Bank suggested the public was ready for the change, but that they had reservations.

Plastic banknotes spring back when folded, and concerns were expressed about their “slipperiness”. They also “begin to shrink and melt at temperatures above 120°, so they can be damaged by ironing for example”, the Bank warned.

On the other hand, they are waterproof and last at least 2.5 times longer than “paper” money – made of cotton pulp combined with “linen and other plant fibres”. Paper fivers only last about six months while a plastic replacement could survive for up to two years, the Bank said.

Although polymer notes are more expensive and less environmentally friendly to produce in the first instance, their durability makes them cheaper and more ecologically sound over time.

Britain would be following a well-trodden path if the public does show an appetite for plastic cash. Australia first introduced polymer notes in 1988, and more than 20 countries have since made the switch, including New Zealand, Mexico, Singapore, and Canada. Mauritius was the most recent country to adopt it, in August this year.

The UK has toyed with the idea in the past. A plastic £5 note was launched in Northern Ireland to mark the millennium but it did not catch on.

Mark Carney, the Bank’s Governor, introduced polymer notes to Canada in 2011 when he was Bank of Canada Governor. Canadians were not immediately smitten, as they found the notes hard to separate and preferred their “folding stuff” to fold.

Charlie Bean, deputy governor, said: “Polymer banknotes are cleaner, more secure and more durable than paper notes. They are also cheaper and more environmentally friendly. However, the Bank would print notes on polymer only if we were persuaded that the public would continue to have confidence in, and be comfortable with, our notes.”

The Bank said it has been researching potential materials for the past three years. When it put its printing contract out to tender last year, bidders were told they would need to be able to use a variety of materials.

Britain’s De La Rue currently has the contract, but rival bidders are thought to include Munich-based printing giant Giesecke & Devrient; Landqart – the bank note division of Canadian wallpaper and pulp company Fortress Paper; Note Printing Australia, a division of the Reserve Bank of Australia; UK-based Innovia Film’s subsidiary Securency; and France’s Oberthur.

Bidders have to demonstrate that they can print 500m notes a year at a single site, and will need back-up premises. Last year, the Bank produced 1.3bn new notes and notes in circulation were worth £58bn. Some 845m notes were destroyed.

The winner of the tender is expected to be announced next year.

The contract is for an initial 10 years with a potential three-year extension and is estimated to be worth nearly £1bn in total. However, the Bank claimed in its cost-benefit analysis that the savings over a 10-year period from moving to polymer for the £5 and £10 notes alone “will exceed £100m”, which is estimated to be a 25pc saving on those denominations.

The potential savings will raise questions about whether the contract winner will be able to retain all 200 staff at the Bank’s printing works in Debden, Essex, which have been run by De La Rue since 2003 after it won the 10-year deal in 2002.

A condition of the contract is that printing will continue at the Debden works, and that staff would be “tupeed” over to the new provider.

However, after an initial heavy print run to get the new notes into circulation, the Bank would expect there to be fewer replacements runs – raising the risk of redundancies. De La Rue currently uses the Debden works for clients other than the Bank.

The Bank has yet to decide how old notes will be disposed of. Currently, paper money is “shredded, compacted and then used with other organic materials in the manufacture of agricultural compost”.

Plastic cash could be used to “create a form of bio diesel” or, alternatively, could be recycled into “plant pots and garden furniture”.